Ava Risk Group reports a softer first half with delayed orders impacting revenue, but anticipates a robust recovery in the second half backed by new contracts and a strategic investment.
- H1 FY2026 revenue forecast lowered to $14 million due to order delays
- Strong H2 revenue guidance of $23–26 million driven by backlog and new contracts
- Sales order backlog stands at $7.8 million including recurring revenue
- Secured up to $12.6 million strategic investment from Hale Capital
- Focus on U.S. market expansion supported by new funding
A Challenging Start to FY2026
Ava Risk Group Limited (ASX, AVA) has revealed a softer than expected trading performance in the first half of fiscal 2026, with revenue now forecast at $14 million, falling short of earlier guidance by approximately $3 million. The shortfall is primarily attributed to delays in key orders, including deployments of their Aura Ai-X system to U.S. corrections facilities and detection systems for government sites, some of which were impacted by a U.S. government shutdown.
These delays have pushed anticipated revenue into the second half of the financial year, creating a temporary dip in performance but not necessarily a loss of business. The company remains confident that these orders will be fulfilled in H2, underpinning a strong recovery.
A Promising Outlook for the Second Half
Looking ahead, Ava Risk Group has set an ambitious revenue guidance of $23 million to $26 million for H2 FY2026, which would bring full-year revenue to between $37 million and $40 million. This optimism is supported by a healthy sales order backlog of $7.8 million, which includes $2.6 million in contracted annual recurring revenue, and a pipeline of large program tenders expected to convert into orders soon.
Notable upcoming contracts include significant projects in the Middle East focused on border protection and oil and gas infrastructure security, as well as infrastructure projects in Australia and Latin America. These contracts highlight the company’s expanding global footprint and its ability to secure multi-year service agreements.
Strategic Investment Fuels U.S. Expansion
In a strategic move to bolster growth, Ava Risk Group has entered binding agreements with Hale Capital for an investment package of up to $12.6 million, comprising a $7 million convertible loan note and $5.6 million in associated warrants. This capital injection is earmarked to support the company’s expansion in the United States, its largest and most attractive market.
The initial tranche of nearly $3 million is expected to be received imminently, with a further $4 million contingent on shareholder approval anticipated in March. This partnership not only provides financial muscle but also aligns Ava Risk Group with a strategic partner experienced in scaling technology businesses.
Looking Ahead to the Half-Year Results
Investors will be watching closely for the company’s half-year financial results due on 25 February 2026, which will provide a clearer picture of how these delayed orders and new investments translate into financial performance. The company’s ability to execute on its backlog and convert tenders into firm contracts will be critical in validating the optimistic H2 revenue guidance.
While the first half’s delays have introduced some uncertainty, Ava Risk Group’s diversified global projects and strategic funding position it well for a rebound. The coming months will be pivotal in confirming whether the company can deliver on its growth ambitions amid a competitive and evolving security technology landscape.
Bottom Line?
Ava Risk Group’s H2 performance and successful deployment of new capital will be key to restoring investor confidence.
Questions in the middle?
- Will Ava Risk Group successfully convert its large program tenders into confirmed orders in H2?
- How will the U.S. government procurement environment impact future order timing and revenue recognition?
- What are the terms and potential dilution effects of the convertible loan notes and warrants from Hale Capital?